To The Portal, Not the Port

Posted on:12/5/2013

Strong connections between U.S. part buyers and U.S. part suppliers are key.

On a grassroots level, reshoring depends on the right U.S. suppliers and the right U.S. buyers finding one another. However, these connections are often difficult to establish.

As more public and private institutions seek to promote reshoring and strengthen U.S. manufacturing, this gap is being recognized as a serious problem. Among the fixes that are emerging to ease this situation, one of the most promising is a collaborative effort between ARDEC and fabricating.com for the state of New Jersey. It’s a model that can be replicated elsewhere because it addresses the practical matters of establishing workable, mutually beneficial relationships that enable local sourcing of custom-made parts.

ARDEC is an acronym for the U.S. Army Research Development and Engineering Center at Picatinny Arsenal, New Jersey. Fabricating.com is an online marketplace created solely for U.S. buyers and suppliers. They were brought together by ARDEC’s Small Business Initiative.

I spoke to Frank Russo, CEO of fabricating.com. He explained that the business of fabricating.com is to facilitate exchanges between U.S. companies by providing an effective online sourcing platform. One core concept behind this platform is that buyers and suppliers are carefully screened so that the request for quote (RFQ) process is highly efficient for participants. By analyzing details from a comprehensive and complete RFQ template, the platform locates U.S.-based contract manufacturers with the precise capabilities for the job a buyer seeks to award. Once connected, the parties have an array of online tools to streamline transactions.

Fabricating.com agreed to create an exclusive portal tailored for ARDEC, a major parts buyer, and participating supplier members in New Jersey. Having a special portal is important because ARDEC’s eligible suppliers must meet specific requirements such as having certain Department of Defense certifications and a specific code classification. Many capable job shops and contract manufacturers do not have the resources to complete this certification and coding process.

Frank explained that the ARDEC portal includes online utilities and aids to overcome this entrance barrier. These software features help bootstrap New Jersey suppliers who might otherwise be closed out because they are not ready to do business by the big buyer’s rulebook. ARDEC (and other New Jersey defense contractors who have joined in) get the benefit of a larger base of potential suppliers in the “sweet spot” to fulfill orders for short-run/high-value parts—the jobs contractors find the toughest to place efficiently.

Frank said the idea of a special portal for an online marketplace is being studied by groups promoting manufacturing in other states. He noted that these initiatives to bolster local manufacturing are not intended to restrict opportunities for out-of-state suppliers. “When a local match isn’t feasible, it’s easy to punch the RFQ out to qualified supplier members in a broader regional or national reach. What matters is that U.S. parts buyers have greater assurance that options to keep work on-shore or bring it back home are not being overlooked,” he said.

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